eBay might be the worlds largest online auction site, but when it comes to accepting responsibility for what is posted on it’s site, or getting involved in problematic transactions, the company is more content to sit back and collect its fees than get involved.

While the cyberspace giant might like to promote itself as “a safe and reputable place to trade,” many people have found this not to be the case. Hijacking of sites and theft of user identities is a problem the company acknowledges, but refuses to release any figures on.

Likewise its much vaunted accreditation system that is supposed to give buyers and sellers confidence in their transactions, is prone to abuse and can provide buyers and sellers alike with a false sense of security.

Similarly, its “feedback” system that is the benchmark customer‚Äôs use for gauging the reputations of buyers and sellers they are dealing with, is open to abuse and manipulation.

Feedback is the primary tool that eBay uses to build confidence between buyers and sellers, with each side applying a positive, negative, or neutral rating and a short comment to each other following transactions.

eBay tells its customers, to check a seller’s feedback profile before you bid on an item to see how reliable they have been in past transactions.

“Learning to trust a member has a lot to do with what their past buyers or sellers have to say”.

“Leaving honest comments about a particular eBay member gives other community members a good idea of what to expect when dealing with that member,” it claims.

In attempting to build confidence in the site, eBay says, “once it‚Äôs left, feedback becomes a permanent part of the member’s feedback profile.”

Of concern, is this steadfast refusal by the company to interfere or alter the feedback rating or comments posted against members, even when glowing inaccuracies are pointed out.

While eBay would have its customers believe otherwise, its sites are regular trolling ground for scam artists acting as both buyers and sellers . . . all of whom have passed the eBay registration process and many of whom have glowing feedback ratings and comments for supposed prior transactions.

No more obvious is the fallibility of the system than in the case earlier this year when a registered eBay customer with the identity of “jonno504” advertised the grounded bulk carrier Pasha Bulker for sale . . . attracting 21 bids up to $16 million before eBay removed the listing.

At the time “Jonno504” had a 100 per cent positive feedback rating, including comments such as “Great Seller! – A pleasure to deal with,” supposedly from other eBay customers.

Similarly, in May last year, another registered eBay Australia customer listed New Zealand for sale, with a starting bid of one cent. The listing was eventually removed, but not before 22 bids had been placed.

When problems occur with transactions between its members, the company takes a backward step in cyberspace.

Writing on the consumer complaints website, notgoodenough.org, NGE member “gkaye4” complained about the woeful state of eBay‚Äôs internal gripe processes.

“I have a dispute on eBay but there is no real person you can ever contact, you just go round in circles from one computer generated page to another.

“I even paid $20.00 for a so-called mediator. The mediator just does not exist, and neither does your $20.00 anymore.”

Australian Personal Computer (APC) Web Editor, Dan Warne, detailed a similar complaint on his Warne Account web site (http://danwarne.com).

According to Mr Warne, his experience of fraud on eBay was buying a set of ‘official Singapore studio release’ West Wing DVDs from a user named ‘Kissoii_DVD’.

“Of course, he had the full compliment of positive feedback from ‘very happy’ customers. When they arrived, they were a bad pirated copy‚Ä¶ the DVDs had been compressed to fit onto 4.2GB discs (which had been pressed in a factory, but presumably mastered on DVD-R) and I had two copies of disc 1, and no disc 2.”

At the time eBay offered a buyer protection scheme (subsequently abandoned unless payments are made using eBay‚Äôs sister company PayPal), but to make a claim a professional valuation was needed. This would have cost $30, while eBay would have deducted a $25 processing fee. The net result would have been a $15 return on his original $70 purchase.

Mr Warne chose to pursue eBay’s dispute resolution process to see if he could convince the seller to return his money.

Mr Warne said, “the back-and-forth process basically involved the seller being adamant that the goods weren’t pirated and me being adamant that they were. The ‘process’ ended up being closed by eBay because the seller stopped responding”.

Mr Warne also quotes a user named “Aussersterne,‚Äù who claims to be a former employee of eBay. This person claims, they actively do not work to shut down fraudulent sellers or auctions, because to do so would be to assume liability, which is precisely what they don’t want to do.”

Their position is that they are just a middleman that connects buyers to sellers. The rest is up to you. If you are defrauded, they want you to go to law enforcement, not to eBay.‚Äù

In this day and age its not unusual for people to use the same identity for their email accounts, blogs, social networking identities and eBay buying and selling accounts.

It’s also an increasingly common practice for employers, recruiters, journalists, law enforcement agencies and a host of other businesses to use search engines such as Google and AltaVista to troll through cyber space to gather information on employees, job applicants, people they are writing on or whom they are investigating.

For these reasons a persons cyber reputation and identity is as important as their real-world reputation and identity. People feel particularly aggrieved if they are defamed undeservedly in both real life and in cyber space.

However, while eBay actively encourages its members to leave feedback scores and comments about other members, it accepts no responsibility for the accuracy or truthfulness of these comments.

This policy of non-intervention means it is relatively easy for one person to damage another person‚Äôs identity and reputation without fear of retribution by eBay.

At the very least this can affect the persons ability to buy and sell items on eBay and at the worst can affect them in other areas of business or life. As such it should be a matter of concern for the 17,000 Australian sellers who make their primary living from the site, as well as the tens of thousands of people who regularly use the site for purchases.

Even more concerning to Australian users is the company’s lack of a physical presence in Australia. This allows it to skirt its way around laws that companies with a physical presence can’t.

From what I’ve been able to ascertain, eBay‚Äôs only “physical” presence in Australia is it’s public relations spokesman, Daniel Feiler, who provides the same smooth and defensive answers to criticism of the auction site that he honed while defending the actions of a major oil company.

When a problem occurs with a transaction or feedback comment, eBay Australia’s five million Australian customers find themselves with little avenue for action, apart from firing off emails to the company, or discussing the problem online with remotely located service representatives, who in turn tell you to fire off an email.

If you attempt to find a telephone number to talk to a real live customer service representative you’re out of luck as such a number doesn’t exist.

eBay‚Äôs preparedness to skirt around Australian laws is highlighted with its handling of GST.

While GST was introduced in 1999, along with the requirement that all goods advertised for sale must show the GST inclusive price, it wasn’t until mid 2005 following approaches by the Australian Competition and Consumer Commission (ACCC) that eBay required its Australian sellers to comply.

This followed an approach by the ACCC, who contacted eBay in 2004 with concerns that many traders were listing items for sale with auction or fixed “Buy It Now” prices which were exclusive of GST.

As a result many buyers were finding themselves slugged with an extra 10 per cent on top of their purchase price, while honest traders who displayed goods with prices inclusive of GST were loosing sales.

It’s lack of a physical presence in Australia also means it can ignore other laws as well.

For example, the laws of New South Wales are used to govern the agreement for users of the Telstra BigPond service.

Part of the agreement between Telstra and those who use it’s BigBlog hosting and messaging services is that users will not “use telstra.com in a way, or post to or transmit to or via telstra.com any material, which interferes with other users or defames, harasses, threatens, menaces or offends any person or which inhibits any other user from using or enjoying telstra.com”.

Telstra customers must also not “use telstra.com for any activities, or post or transmit to or via telstra.com any information or materials, which breach any laws or regulations, infringe a third party’s rights or privacy, or are contrary to any relevant standards or codes”.

Likewise Australia publishers, and those whose publications are available in Australia, are subject to Australian laws on what can and cannot be published.

The different tests that can be applied to material to ascertain whether someone has been defamed and whether a libel has been committed has long been a mine-field Australian journalists, publishers and broadcasters have had to tip-toe through.

If a particular State’s law was more advantageous than another, a person who felt defamed could launch action against a publication or broadcaster in whichever Australian State best suited their claim . . . provided the publication or broadcast was obtainable in that State.

By not having a physical presence eBay side steps its obligations to remove or block offensive or defamatory material on its site by relying on the Code of Laws of the United States of America.

In particular, section 230, part 1, subchapter II, chapter 5, title 47 which covers the protection for private blocking and screening of offensive material.

This Code, as defined by the US Congress, states “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

The online auction site also relies on a November 1997 U.S. 4th Circuit Court of Appeals judgment in a case
brought by Kenneth Zeran against America Online Inc., which affirms the Code of Laws as a shield for web content providers.

By hiding behind this legislation, and by not having a physical presence in Australia, eBay places itself in the rare position of being protected against legal action for defamatory comments that it allows to be posted on its site.

It’s only when eBay users dig deep through the site that they find disclaimers such as, “we have no control over the quality, safety or legality of the items advertised, the truth or accuracy of the listings, the ability of sellers to sell items or the ability of buyers to buy items.

“Nor do we publish, endorse, approve or control content that may be posted on our site by eBay users, including but not limited to feedback, auction listings, postings on public comment boards and About Me pages.”

Where an eBay user feels they have been defamed, they are advised to “contact a lawyer to confirm that the content you have identified is in fact defamatory.”

According to eBay.au, New South Wales law broadly defines defamation as a publication communicated to someone, other than the subject, which is liable to cause ordinary, reasonable persons to think less of the subject or shun or avoid the subject. Defamatory publications will include aspersions upon an individual’s reputation for honour, honesty and integrity as well as disparagement of an individual’s reputation in trade, business, profession or office.”

Those who feel another user has defamed them are then required to complete a ‘Notice of Claim of Defamation Statutory Declaration’ and send that to the company, along with the comments they feel are defamatory.

The company says it will then investigate the allegations and take appropriate action. However it warns those lodging complaints that if the objectionable content appears in a feedback comment, “we may remove only the comment portion of the feedback, not the actual rating.”

While users have ability to make their feedback private, meaning the comments will not be publicly displayed, doing so prevents people from being able to sell items on eBay.

Earlier this year the 22-year old company reported a record consolidated second quarter net revenue of US$ 1.83 billion, representing a growth of 30% over the same period in 2006. Operating income was US$ 457 million, an increase of 47% year-over-year.

According to the company, eBay’s users posted a total of 559 million listings in the period, which generated gross merchandise volume (GMV) of US$ 14.46 billion. This equates to a 12 per cent year-over-year increase in revenue, despite a six per cent drop in listing over the same period in 2006. These figures ignore income generated by its sister companies, PayPal and Skype.

Given such revenues it‚Äôs not unreasonable for users of the site to expect the company to take a greater responsibility and involvement in the actions of both the sellers and buyers who use its service.

At the very least it could require all buyers and sellers to pass the standard 100-point identity test used by banks, credit card companies and telcos to ensure the bona fides of its users. It could also take a much more active role in disputes between parties and take a more affirmative role in ensuring the reputation of its customers is not diminished as a result of using the service it offers.

eBay was given the opportunity to comment on the matters raised in this story but as of the time of writing no representative of the company had contacted me in regards to the matters raised.